Now, Vonage Says Customers Still Have To Pay Up For Shares

from the not-so-fast dept

With its stock price tanking following its IPO, the news that made the rounds yesterday that Vonage indemnified its underwriters and would cover the cost of shares allocated to customers who now don't want to pay up led to speculation that they'd be let off the hook. However, Vonage has moved to make it clear that isn't the case, and that it expects everyone who was allocated shares to pay up. This is certain to cause them a few problems, both from customers who want to get out of their obligation because of the falling stock price, as well as those alleging problems in the allocation of shares and ended up with shares when they thought they were receiving none. Vonage's IPO has been a financial mess, but the real fallout will be in the lingering damage it does, both to the company's balance sheet and to its reputation with customers.

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  1. identicon
    SammyJ, 1 Jun 2006 @ 12:00pm

    I did it...

    I admit it, I bought the stock... I have been a Vonage customer for almost a year now and have ZERO complaints. I save about $50-60 every month compared to what my phone bill used to be.

    When I heard about the IPO I wanted in, though I was almost scared off by reading through the prospectus in which Vonage made it very clear that committing to purchase shares was risky. I had to have been forced to read and check off boxes acknowledging I had read in their material (at least three times!) that they were not profitable and were not planning on being profitable anytime in the near future.

    Sure the share's are down $5.36 from where they started and people are saying they do not want to pay...but let's say tomorrow they gain that $5.36 back and then some. Those customers who have not paid yet for the stock allocated to them are going to be quick to want to pay up at $17 (even if its value was $20) because they feel "entitled" to why are they not "entitled" to pay for the loss too??

    The stock market is a risk and those that bought without doing their homework need to realize this is not some game or a "sure thing."

    I am in this for the long haul!

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